No matter how much you try, you may seem not to have enough money at some point. We’ve all been there. With the current sky-high inflation, high-profile bank failures, and worries of recession, things are no better. According to a recent report, a larger percentage of Americans’ top concerns and financial worries are failing to have enough money for retirement, maintaining living standards, and paying bills.
While financial stress often results from external factors, a few tactics can help mitigate the situation and enhance your journey to financial stability. Here are ten effective ways to manage financial stress.
Pinpoint the Top Sources of Money Stress
The first step to tackling financial anxiety is highlighting the specific issues taking away your sleep at night. It can be a high-level debt, an upcoming bill, an emergency expense like a car breakdown, or abruptly losing your job. Understanding the primary sources of your money stress can enable you to tackle the problem better.
List down all your biggest financial challenges to begin brainstorming on how to address each item. Consider keeping the list short to avoid feeling overwhelmed. You can review your list periodically as the situation changes.
Develop a Spending Plan or Budget
A spending plan acts as your checklist. It keeps you in control of your finances and helps you manage your spending habits to avoid overspending. Determine how much money you expect each month after tax deductions; that is net income.
Note down all the expenses, including rent, utility bills, mortgage, and your favorite cup of coffee. Highlight the expenses you can cut down and those that are absolutely necessary. The bottom line is to have a budget that reflects what is of uttermost importance to you and cuts on non-essential items.
You can integrate budgeting software into your budgeting and financial planning system. This will help streamline the planning process and alleviate the stress that comes with money management, enabling you to achieve your saving and spending goals more efficiently.
Find Ways to Get More Money
While cutting your budget will go a long way, you would want to avoid putting the budget under strain as it can cause additional stress. Instead, consider looking for additional ways to increase your income.
Considering the current tight labor market and high inflation, you can try to negotiate with your employer for a pay rise. Ask your employer if you can work additional hours each week to get overtime pay.
If you have items you no longer need, such as clothing, furniture, and tools, put them on sale. You can also take on a side gig, like running a blog, tutoring, or delivering food. If none of the above is an option, boost your finances and keep life moving with weekend payday loans as you wait for your monthly income.
Automate Some Financial Transactions
Always forgetting to settle your bills and consistently having to pay late fees can be a source of stress. Fortunately, automation can solve this problem. You can allow money for settling certain utility and insurance bills to be automatically deducted from your account.
The good thing with most credit card issuers is that you can establish automatic weekly and monthly payments. Besides that, automation can help you maintain consistency with savings. You can allow an automatic money transfer to your emergency fund, high-yield savings account, or retirement fund to meet your savings goals.
Talk to Your Lenders About Your Debts
Debt can be a constant source of stress as well as a major mental and financial burden. If you are not in a position to settle your debts at the moment, discuss the issues with your lenders to get a short-term solution.
Your lender may willingly modify your loan by reducing the interest rate or extending its term to lower your monthly payments. While at it, look for ways to clear your credit card debts, such as debt consolidation, credit card balance transfer, snowball method, and avalanche method.
Seek Outside Help
If your progress in lowering your debt budget isn’t satisfactory, it will be best to look for help from trusted resources, like the National Foundation for Credit Counseling and the Federal Trade Commission.
You can also talk to a financial advisor to get guidance on your short-term and long-term goals, like savings. Family and friends can be of great help too. Just ensure you establish clear expectations and boundaries to avoid ruining the relationships.
Create an Emergency Fund
Consistently setting aside some funds to fix emergencies like unexpected job loss, car breakdown, and illness can help relieve financial anxiety. Your budget can help you determine the amount to contribute to your emergency kit every month.
You can enable automatic transfers from your checking account to your savings account to encourage consistency. Make it a priority to build an emergency fund that can cover living expenses for about three to six months.
Change Your Money Communication Style
Sometimes, financial stress results from how you communicate with your partner about money. Chances may be your money goals don’t align. However, you can embrace healthy financial communication styles and determine the best ways to discuss finances with your partner.
Come up with regular touchpoints where you go through your collective wins and losses. Such discussions will enable you to address small financial problems and seal money wastage loopholes in good time. It is also a perfect time to include a new financial goal in your plan.
Keep Track of Your Money-Saving Progress
Having a positive mindset and good financial health involves knowing your options, opportunities, and how your finances are working for you. By tracking your money-saving progress, you determine your precise financial situation and positively impact your overall well-being. It helps you tell whether your actions move the needle. Consider using a savings calculator to highlight how soon you are to attain your financial goal.
Reduce Emotional Spending
It is common for most people to seek instant relief in impulse buys or emotional spending when stressed. While it may offer a quick jolt of satisfaction, emotional spending or retail therapy can lead to a tightened budget, severe shopping addiction, or debt coupled with immense guilt. Use the best ways to handle financial stress rather than rushing to an online app or physical store to forget your worries through shopping.
Even though financial anxiety and stress have been on the rise lately, you can use the best strategies above to stay afloat and make your ends meet. Emphasize wise spending, stick to your budget, and keep up with your savings progress. Also, seek help from the right people, such as a financial advisor.
